Medicare drug plans costing seniors more

June 5, 2008|Los Angeles Times

WASHINGTON — As if escalating prices for food and gas weren't enough of a worry, most seniors in Medicare's prescription program are paying considerably higher monthly premiums for coverage this year, according to a study to be released today.

Those in the 10 largest plans, which account for nearly three-fourths of seniors signed up for drug coverage, are paying an average of $26.39 a month, or 16 percent more than last year, according to the analysis by Avalere Health, an information company serving the healthcare industry.

The rise is modest in dollar terms, and some of the top plans actually lowered their premiums for 2008. But on average, the percentage increase for the drug plan is greater than the change in Medicare's Part B premium for outpatient care, which rose only 3 percent in 2008.

"A 16 percent increase is significant in and of itself, because premiums are rising rapidly at a time when Medicare beneficiaries are finding it harder to afford it," said Dan Mendelson, president of Avalere. "These are individuals on a fixed income who facing rapidly rising prices elsewhere in the economy."

He said premiums for many seniors appear to be going up faster than the cost of coverage for commercial insurance plans that serve workers and their families. Data from Mercer, a benefits consulting firm, show that drug-benefit costs rose a little over 9 percent last year for large employers.

Both kinds of coverage are delivered by private insurers, but since the Medicare plan is heavily subsidized by taxpayers, a precise comparison is difficult.

Of the top 10 plans, six raised their premiums, while four reduced them.